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BCA boosts profits with lower deposit rates
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Bank Central Asia director Subur Tan (left to right), president director Jahja Setiaatmadja, president commissioner DE Setijoso, director Anthony Brent Elam, director Suwignyo Budiman and commissioner Tonny Kusnadi talk during a public expose on July 29, 2015 in Jakarta. (The Jakarta Post/Don)
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decrease in the cost of funds due to lower deposit rates propped up Bank Central Asia’s (BCA) profits amid an economic slowdown in 2015. The Djarum group-controlled lender reaped Rp 18 trillion (US$ 1.4 billion) in net profits, a 9.3 percent increase on the previous year.
BCA president director Jahja Setiaatmadja explained that demand for loans had decreased last year. In response, the country’s largest private lender chose to slash its deposit rate by 200 basis points from 7.75 percent to 5.75 percent.
"The decline in the cost of funds is due to a decrease in deposit interest rates," he said at a press conference in Jakarta on Thursday, adding that the measure has caused deposits in BCA to grow by just 1.7 percent to Rp113.4 trillion.
The lender’s CASA (Current Account and Savings Accounts) ratio was very high at 76.1 percent, with CASA funds amounting to Rp360.3 trillion from total third-party funds of Rp 473.7 trillion. A high CASA ratio means that a bank has an abundant source of cheap funds, allowing them to gain more profit.
In 2015, BCA saw total loans grow by 11.9 percent to Rp 387 trillion, driven by corporate loans that increased by 17.2 percent to Rp 141.3 trillion. Meanwhile, commercial and SME loans rose by 9 percent to Rp 146.2 trillion.
BCA corporate banking director Dahlia Ariotedjo said five sectors had driven the bank’s corporate loans business in 2015, namely telecommunications (up by Rp 3.6 trillion), tourism (up Rp 2.3 trillion), manufacturing (up Rp 2.1 trillion) and transportation (up Rp 1.6 trillion). (ags)
